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Should you set up a revocable living trust?

On Behalf of | Mar 2, 2022 | Estate Planning

In Virginia, a trust is an important estate planning tool that allows you to designate someone to manage your property and affairs if you become incapacitated. There are many different types of trusts, and revocable living trusts are one of the most popular ones.

What is a revocable living trust?

A revocable living trust is a type of trust that you create while you are still alive. You can revoke (or cancel) the trust at any time, and you remain in control of your property and affairs. One of the main purposes of including a revocable living trust in an estate plan is to avoid the probate process. On the other hand, an irrevocable living trust cannot be revoked.

What are the benefits of a revocable living trust?

Besides avoiding the probate process, one of the main benefits of a revocable living trust is it helps maintain your privacy. Probate is a matter of public record, so if you want to keep your estate private, a revocable living trust can help you to do that.

Another benefit of a revocable living trust is its flexibility. You can change the terms of the trust at any time as long as you are still mentally competent. For instance, if you want to add or remove property from the trust, you can do so.

Finally, a revocable living trust can help you save money on estate taxes. If your estate is large enough, it may be subject to estate taxes. With a revocable living trust, you can minimize, or even avoid, estate taxes altogether.

If you are considering creating a revocable living trust, you should make sure that the trust is funded. This means that you need to transfer your property into the trust. If you don’t do that, it will be ineffective.